Google LLC has agreed to pay $700 million and change the policies of how operates its Google Play app store to settle an antitrust lawsuit with U.S. states and consumers.

The settlement, tentatively agreed upon in September, was formally disclosed late Monday evening. It provides for a $630 million customer fund and an additional $70 million fund for states.

The lawsuit grew out of a group of 37 states, representing over 21 million customers, and focused on the business practices of Google’s mobile app market within the Google Play Store. When the suit was filed, developers using the Play Store were forced to use Google’s own payment system, which would charge them a commission of between 15% and 30% of each transaction.

The lawsuit alleged that because there were competing payment systems that charge lower commissions and other ways to allow users to download apps, forcing developers to go through the Google Pay Store’s payment method was anticompetitive. The lawsuit claimed that Google entered into exclusive contracts with mobile services and Android phone makers to make certain other app stores were not preloaded on their phones, meaning that customers would not find them.

The complaint also noted that the Google Play store maintains a 90% share of the market in terms of app distribution on Android phones and no other third-party app store has a market share of over 5%. That allegedly gives Google a massive and unfair advantage.

The stipulations of the settlement are numerous, in a blog post, in addition to the money paid Google outlined the policies it intended to carry out including allowing third-party app stores to be preloaded on original equipment manufacturer Android phones as well as permitting users to “sideload” or download apps directly from developers.

“The settlement with the attorneys general makes clear that OEMs can continue to provide users with options out of the box to use Play or another app store,” said Wilson White, vice president of government affairs and public policy at Google. “We recently implemented features in Android 14 that will make third-party app stores work even better for users and let third-party app stores update apps more easily.”

As part of the settlement, Google may not enter into exclusivity deals with OEMs for at least five years. The company must also work with an Independent Compliance Monitor to report on the company’s activities for the next five years.

In addition, Google will make it possible for app and game developers to “implement an alternative billing option alongside Google Play’s billing system for their U.S. users,” to choose which option they want for in-app purchases. At the same time, Google will be expanding communication about pricing.

This news comes shortly after Google suffered yet another major antitrust loss regarding the Google Play app store earlier this month when a federal court judge ruled in favor of video game giant Epic Game Inc.

In that case, which began three years ago, Epic sued both Google and Apple Inc. over what the company called excessive charges in app stores and claimed the practices of both companies were monopolistic. Google vowed to challenge the verdict of the Epic ruling.

Photo: Pixabay